Over the Borderline

been made? We'll talk to a strategist who has some thoughts on what market stage we're actually in and why he's looking across the US border into Mexico and Canada for stocks that will benefit the most from the key themes of But first, Charlie Pellett tell us who this week's mystery co host is. The sweek's mystery co host is Diva Baljie. Diva is the team leader for Bloomberg's equity market coverage in the America's. She lives in Toronto and loves the Raptors, but she is not a fan

of hockey due to all the fighting. Food and travel are her passions, and believe it or not, she says that's why she prefers New Jersey over New York. If you have, my heart grew three sizes when I heard that you preferred New Jersey over New York. Not that I have anything against New York, great city, grade state, but finally some respect for us here in the Garden State. But I got asked, what makes you bullishaw New Jersey?

Especially the food? I'm curious, you know, I I'm pretty sure I'm going to get a lot of hate tweets from saying this, but it just kind of feels like New York's a bit overrated at this point, and having spent a lot of time in Jersey, We've got family there, and you know, we just the food is great. You know, people are friendly. Um, there's a lot of space. I just I really like it. I love to hear it. Direct your hate tweets at if you not at mean, actually,

if you can direct him to me too. I'm curious curious what they say about that one. But hey, New Jersey just ranked the number one state for pizza by Food and Wine magazine. So the respect is finally coming. Finally, some some respect for the Garden State. But let's get to that Market's Chat. We're well, very happy to welcome back to the show. It's actually his third time on the show. I think he gets a tote bag or something for that. But he is the director of Global

market Strategy at stone X Financialist. Name is Vincent de Luards and welcome back to the show. It to be here, Yeah, it's it. I've been reading some of your notes, and uh, you've got a pretty interesting, what I consider kind of a non consensus view of sort of where we are

in the market cycle. And correct me if I'm misinterpreting you here at all, but you sort of have disregarded the very fast bear market of last year as something that did not in fact reset the market cycle and does not make this a new, younger bull market that's only say, a little over a year old. Rather you see it as sort of just a continuation of the long,

decade long post financial crisis bull market. So walk us through your thinking on that and sort of what that means for returns going forward or volat totally going forward if we are kind of late in the cycle of a ball market. So the first discrepancy, and I think is just the speed of the gains we're looking at you know, basically doubling on the SMP five hundred index in evening about a year um, which again does not

happen typically. I mean typically the classical saying is stocks stay the edited down and the stairway up right TPP. It's when you rally, it takes longer to get there. Here, we had such a nice, clean v that is more consistent with what we saw you in the Great Depression, when we had a lot of these very brutal bear market but also bullmarkets. I mean, some of the fastest rallies in history happened in the nineteen thirties, but of

course they were not sustained. UM. Second indication that we are still in a in the same cycle as before is um the weakness of buybacks. So in in a bona fide um bull market, what you see is as as as stock valuations are depressed and earnings are coming back, cash flow was improving, you see companies buy back more

of their stocks. This is happening to some extent, but we're still about fifty percent off the levels that we wear uh pre covid um, and a lot of the buy backs that we are seeing are really just coming from the tech sector where this is not really a buy back, it's a way to offset the delusion from stock based compensation. So you see buy backs, but you don't see the float drink um. Speaking of float, another

inconsistency that we've seen is this this massive increase inequity issuance. UM. We had the biggest month quarter on record, much much higher than what we had during the Internet bubble, as companies have been really just taking advantage of these extraorminity evaluations to raise equity. Again, not something that you would see at the bottom. UM. The same thing with inside the selling. I mean typically at a major market bottom you see you know, insiders sell less and buy more.

When we see the opposite we see especially among big tech company mas lack insiders as just cashing it out. UM. And then the last part that's um not consistent with a new ball market is the behavior of retail. So typically at the DNT of a new bull market, you know there's a lot of distrust, there's a lot of fear, so the money is more like players like one buffet long term investors that are you know, brave enough to

dip their toes UM. Here it's exact opposite, right, you see. Um. You know, obviously cash level at at Berkshire is a closer record high. And on the other hand, we had the largest inflow UH for the in eats ever for the past uh eight weeks. So we are seeing basically corporations and inside of s catching out retail buy me in, which is typically what you see at major market tops or at least at the end of the ball market, not at the beginning. So Vincent, I guess, you know,

I might be a bit more skeptical about this. I mean, there's a lot of things that play here, right, I mean, this market is so different from anything we've ever seen in the past. Um. You know, obviously there are companies that could possibly be cautious about doing buy backs right now. They might be waiting for just a little bit more normal fee um, you know, and from that buybacks perspective as well, US banks also just recently got the okay to buy shares or the purchase shares that should help

with the comeback as well. UM. And also the retail buying that we've seen is also pretty unprecedented given the environment that we've been in. Um, how do you sort of, you know, say, okay, I'm looking at this and you know, not really this is why this we're coming to the end of the bull parking. I mean there's also the option of, like Tina, where what are your other opportunities out there to actually put your money in? Yeah? These are good old, very fair points. UM. I agree with

you that this is unprecedented. Obviously it is. And in a way it makes me feel like we should even discard everything that happened, uh, you know between Mars and today. And this is what makes me think that we are still in that same cycle. I mean you mentioned the world, Tina. I mean this was the mentra of the past ten years. UM. So yes, the same thing with their investors. UM, Sarah whom I you know, after I'm sure we all regret

that she's no longer here. You know, she she had she used to run these stories very early on the on the retail manua. UM. And I remember in this conversation with her like saying, well, oh no, these guys are gonna go away. You know it's retail investors the weekends. I mean, this has been a big surprise. How sustainable? Um did this has been? Um? I still think again I have been wrong on this before. And I may still be wrong, but I think eventually this this is

not the ingredients for sustainable ballmarket. I mean, you don't build economic prosperity on on doogh coin and game stop and and mimes tongs. I mean, it's so fun, everybody is having a good time now, but um you know, you really don't have the ingredients for for sustainable economic growth on this. On the banks, I thought you raised a very interesting question, um um so, and it's key to me for the debate on on the inflation and

the nature of the recovery. One thing that is stunning is that we've seen a collapse in the loan to deposit ratio. So typically, you know, we're learning school loan deposits make loan loans make deposit um the not. Usually there is about a one to one loan to deposit ratio.

And with COVID, what we've seen is that that loan to deposit ratio has collapse to less than zero point five for the big four banks in some cases well as far Ago for example, it's because they are not allowed to but even the other the other big three, um, just there has been this lagging in loan insurance and

there's the question is what happens next. And we can go with with your your your theory that you know now that banks are making money again, they're going to do buy backs again and that's that's where this extra capital is going to be returned, or um, we can go with what I think is more likely, which is inflacial review, which is we have all these kind of

trapped kinetic energy in the banking sector. I calculately, if you just look at the Big four and if we wanted to go back to normal loan to deposit ratio, not not even pretty thousand eight, let's go post GFC, meaning with with all the new potential regulations. So if we were if we were to go from zero point five to zero point eight on the loan to deposit ratio, the big four bags will have to issue more than

two point five chillion in new loans. So I think that's something that again the market is not really discounting. I mean, well, we have our eyes on all the infrastructure spending plan, the family Plan, the COVID PLANEL, all these there seems to be a new one every week, a new two trillion dollar panel. I would add, there's a hidden banking steamers, and I could see it happen in te one with a perfect storm for banks, right, because you have steeper yeld curve, so now it's profitable

against the issue loans. They have generally over provisioned the losses. You saw that in the earnings of JP Morgan, right, I mean they were able to release some of these

extra provisions. Some of that they can. They have too much capital, so you know, why keep that capital earning zero as excess visits and the FED when you have you know, an economy that's booming, a consumer that's very good out really really state sector that's on fire, steep heel curves, um, so that could add to these inflationary pressure. And again inflationary pressure should not be an early stage.

Typically at the early stage of a rally. Yeah, you see some some pick up in commodity prices, right because they you know, they're the most cyclical, But the stickier parts of inflasion, whether it's wages or rents or bank lending, do not pick up quite yet. And I think this is what we're going to see, which is again more consistent with the late cycle dynamic than an early cycle one.

I think that point about share supply is interesting. I mean that is often the I p O mania of sated is often pointed to is kind of the pin that that topped the bubble, that just over supply of chairs into the market. And um, you know, on the flip side, though you've you've written pretty eloquently about you call this big blob of money that's kind of chasing bubbles from place to place. I just want to read read a quote from the report because I think it's

it's true and it's interesting. Uh you write, quote, the blob has created a rotating bubble from long bonds to big tech work from home stocks, three opening sectors, electrical vehicles, two spacts and obviously we could add doage coin and and whatever else n f T s to to that list, I imagine. So to me, I guess the play is, you know, it's almost impossible to to identify the top of a bubble and and to say short of bubble

right before it pops. But it seems to me like the play for you is more kind of you know, getting ahead of where that blob is going to go next, right. I mean, there's swollen savings accounts in the US because of the government stimulus, the unemployment benefit enhancements, uh, you know, and just the lack of places to spend your money last year, your disposed lincome. So is that is at it? Vincent?

Is it is the best move now not trying to time the pop of the bubbly parts of the market, but try to get in early on the on the next, the next bubbles in the making. Absolutely, yeah for your point on on the difficulty of of timing. Timing bubbles is impossible at the best of time. And now we have the situation on the bubbles don't don't burst like the blob just moves, but it leaves whether it was in a similar state of evaluation like you look at the r k TF. So clearly you know, this story

to me is kind of over. But we haven't had the big you know, eighty to nine draw down that would have expected, you know, the way it paid out in with the Nazlak stops and in the two thousand, right, just kind of stays there. Um So, I would not try to shot it, but I would try to guess whether blob is going to move next. Um So, I would think there are three areas that have not been touched by the blob and are quickly um um talk

about each one of them. So let me start with the one that I don't believe in, which is garb stock growth at a reasonable price, the quality names. I've seen a lot of strategies and you know, get into this stuff or you know, consumer staples, some healthcare stocks for example. These are these are the last parts of the market that the tech obviously was over value to start with. Then we had the reopened small care that

so real? What leads it leads you with, like, you know, a handful of stock and consumer staples and and healthcare. I'm not excited about that, mostly because of my belief that inflation is gonna come here, and that's he's gonna come stronger and longer than people think. And you really don't want to be in these kind of stocks. Um. So the post that I'm more excited about our um in order playing some reopening trade in Europe, Mexico, which is by far my favorite short term call. And then

precious metal. Um, do you want me to start with any any in new particular order? Yeah, you know, I was. I was gonna ask you about Mexico. I think that's an interesting one. I mean obviously a very sort of cyclical oriented benchmark, uh stock index, I mean a lot of commodity producers, energy producers. That's not all. But though I know you, you're one of the few strategists I've seen actually use the big MAC index and and uh the determined that the pace SO is undervalued. So I

know that's part of it. But get into Mexico a little bit for us about what what are all the sort of book cases for for Mexican stocks? For you, what I think about Mexico, it's really an intersection of what I think are the four big stories. Uh. One is um this studying commodity rally, which you know, for Mexico, the biggest Achilles heal has always been Panics, which you know is horridly run, structural decline and difficult ordination the government.

And you know this is this was an accident in the making, right, I mean, people thought, Okay, this is gonna hit in one and like it's like a lifeline, It's like a gift from heaven. With all prices above sixty, these guys are gonna they're not gonna be great, They will never be great. But at least that's the probably we don't have to worry about UH. And in general, you know, Mexico, the you know, energy and all is a huge part of Mexican GDP, so that they benefit

from that. Second theme is the U S consumer, which you keep surprising to the upside. I mean, we saw it again with the lader's job numbers. Consumers, I mean just just keeps getting better and better. Um, and that benefits Mexico. I mean fifty percent of Mexican GDP is exposed to the US, so it's probably the kind of the single the economy has a single most leverage on

the US consumer. It also plays out via remittancies. So we have all these Mexican workers that are working the US and they'll all be collecting the stimulus checks um and and you know, back home, you know, things are still pretty bad. I mean, Mexican economy suffered a lot last year, so you'll see a lot of money come back from the U S to Mexico, creating flaw setting

the lola buying the paesel. I think it's already twenty five percent you over year, and as we get more stimulus, I expect that to continue, especially as a construction sector. Construction sector improves in the US, you could see this money flow back in UH. Third big big narrative for one is steeper yield curves which benefit financial Again, you look at the Mexican Index, huge weight of banks and financial which is typical of emerging markets which tend to

benefit from steeper yield curve and rising yields um. And then the last theme is more kind of a secular theme, but it's this um ongoing competition or outright cold war between the U S and China, which means that you'll see a preference for shorter supply chain, more regionalization of trade.

And of course Mexico, which has suffered so much from the rise of Asia, the makilga sector certainly is very competitive again in large part because people don't want to have these long supply chains, and also because the Paso, as you mentioned, is the area and the value. If you look at the Big MAC Index, it's in the value by about six And if you look at the current account deficit of Mexico, I mean Mexico has been

a deficit country for ever since I was born. For the first time in I think thirty five years now, Mexico as a current account surplus. So here you go very in the valued currency uh, perfectly aligned with with energy with the US consumer with steeper yield curves uh. And then also a lot of pessimism or in Mexico, like people are very negative about amno. And you know, I don't think you could get any worse than that. So you know, as usual, you want to buy the stories.

You know, you want to buy things going from You make most of your money when things are going from very bad to a little bit better. Not you know this this is the best time to invest in in an emerging market. Well, can we talk a little bit about North of the border as well? Not an emerging market, but you know, has a lot of similarities to Mexico from a cyclical perspective. Um. And given the fact that I set up in Canada. You know why why do you like Canada so much? Is it the stock market?

Is it also the looney which I believe is one of the best performing currencies this year. Yeah, I think everything I said about Mexico applies to Canada. I would say to a lesser extent. I mean, I'm personally I prefer in Mexico, which is I think you have more more leverage, uh than you do in Canada. You also have less of a risk cover. You know, Canada. The big problems, of course a realistate bubble, which seemed again

it's postponed year after year. I mean people have been calling for these two burst for ten years now and they've been wrong every year. So maybe it doesn't burst. But still, I mean in Canada you have this lingering question. Um but again, and I think you can play either way. Um. For you know, more conservative investors. Clearly Canada is a little bit less risky than Mexico, but I think in

terms of risk reward, I prefer in Mexico. Yeah. So that's if if I'm a listener sort of a a retail trader at home trying to figure out, well, how do I play Mexico? How do I play Canada? I feel like a lot of us, say non institutional investors, get get a little nervous looking overseas at companies. Is it, you know, is this something you would play with E T F S or some somehow a sector based strategy? How would how would I is like Joe Schmo listening

at home play Mexico under Canada. Yeah, so one of the issue with the Mexican e t F. The main one is the you know, the index is very UM skewed towards UH Didcom company and and Walmart, which may not be the best bet for for what I'm describing UM. I think it's mostly honestly, it's the currency play, even

a fixed income play as well. UM. You know, one of the issues that UM investors are facing in one and even before is you know, the sixty four portfolio is dead, right, I mean, especially that that fully segment is dead, Like what are you gonna do with your fixed income on location? And you have very few places in the world where you can replace you know, US versialis. I would say Mexico is one of them. I mean I like Asian fixed income and I like Mexico especially

on the short term. I mean, you have everything that I can play out. You can see the spreads compress, you can see the currency strengthened, and then you have a very nice coupon in Mexico. You know, yel curves are very even in the short term, they're they're quite high. UM. So maybe you played fixed income and then if you wanted to, I have a way around it, which I like is to play with Spanish banks. UM. If you look at the major Spanish banks, they make more money

from Mexico than they do Spain UM. And that's the way to maybe get UM less of country specific risk and also with the Spanish banks. And that brings me to my um an next idea, which is you get a play on the reopening of Europe, the reopening of the tourism sector UM, which is going to happen this summer, and you can get them. I mean we're talking. You know,

most banks in Spain trade at zero point. Fact is the open seven book value nine times earnings, so you get you get about a fifty percent discount compared to US banks. And you get a play on Latin America reflation, the week Dallar, the reopening of Europe, steeper curves, which to me are all going to be the themes of Alright, so Vincent, We've we've been to Mexico, we've been in Canada. Uh, we're devious. Even though she doesn't like hockey. I don't

know they you might get more h streets about that. Actually, Vous, that's actually true. I feel like I feel like I've now put out a lot of negative so tweet tweet, there's just too much fighting hockey fans tweet at if you at. Uh, but let's let's stop now. Next port of call. Vincent is in Europe, um, and I want to read another line from one of your reports, Gredded. I'm reading this mainly because I find it hilarious, so

let me just read it here. And you're you're talking about you took a trip to see some family in France and not too long ago, I guess it was April, maybe maybe late March, and uh kind of sounded like full on lockdown conditions were still in effect, and you write quote restaurants, cafes, bars, bookshops, museums, and theaters were closed, making Paris as blurring as Geneva. But so Vincent is gonna get some hate tweets from the from the Swiss

as well, so direct them to Vincent. You can copy me on those two because I'm tying to trying to see those. But you refer to with the Vincent as what you call peak COVID despair meeting. Uh boy, everyone was just sick of lockdowns. There were starting to be conspiracy theories flying much like here in the US, and

just kind of a dangerous situation. But to me is that that kind of contrarian instinct picks in and makes me think that sounds like the time to buy the reopening sectors, the you know, maybe the hotels, the airlines, that sort of thing. The banks, as you mentioned, uh, you know, the Spanish banks, European banks, which boy talked about something that went from radioactive not too long ago. So it's it's interesting to hear a bullish take on

it now. But I mean, is it as simple as that that you know, when things look like they're at their worst in Europe, that that's the time to really get bullish on the reopening. Yes. By the way, I don't think this is something that Americans understand about how bad the lockdowns have been in Europe. Like it always amuses me when I see Americans like, you know, so like dantrums the mask on, like you know, try going

to Europe. Why really, Like you're stuck in your home and you know if you go out without the right piece of paper, you know that you're gonna get a hard and fifty year of find. I mean, if only find cured COVID friends would totally lead the world. Like if we could have you know, we couldn't produce vaccines

but paperwork and finds. I mean we were leaders there, um and and yeah, it's been very frustrating in Europe because it's like lockdown number three or four, right, I mean it's like I do think it's the last, right, but you know, people have you know, it's almost like a hope management strategy. They they just keep noticed, this is gonna keep going because so many times they've been told okay, and now we're going back to normal, only to shut down two months later. Uh, I do think

this is the last. Uh. Yes, you're a bunch the vaccination program at the beginning, so it Canada by the way, Uh, you know we were late. Uh and that costs a lot of lives and that you know, that allowed the variants to spread. And this was a horrible policy mistake, no questions about that. But you know we went two months behind the US vaccine. Stop you look at infection in the US. This is when they started going down the cliff. So now we you know, all the vulnerable,

all elderly sick population is now vaccinated. In Europe, they're getting to people in my age group. Then you'll get the weather. You know, same thing that happened last year. Right, we had a big outbreak in March April, and then we had a very normal summer because people started going out the viruses and spread as much. And then just just politically, I think the reason why we had the lockdown in Europe in in April is so that we could open in May June. Like you know, Macro and Druggy,

there's smart people. They know the importance of tourism for the for the European economy, and they basically needed to get that curve to look like it's going down a little bit so that they could say, okay, fine, now we reopened, let's up a normal summer because we cannot afford another summer of lockdown. So um, we'll have the same dynamic and it will be magnified because in Europe, you know, occasions are a religion. Uh people, people have

been cooked up inside. Um even last even last summer, the tourism season for the places that were open, what was actually very good. We saw higher bookings are normal. Um. So yeah, what is the conclusion you played the reopened in Europe In the US, it's done like it's more stuff. You look at the hotels, the airlines, the restaurants. It's it's it's more expensive than it was before COVID. It's

insane and sometimes about a lot. Uh. While in Europe if you look at the major airlines, I would say we still a fifty percent below PRECOVID high if you look at the hotels, about thirty. Um. So we had this sketch up. Um that's you know, I think could happen in the the next couple of months. Um. I you know, we talked about Europe, we talked about US or North America, we talked about Mexico. Um, where does Asia stand in

all of this? For you know, you mentioned Japanese Um, the Japanese stock market in your report, But um, where does Asia stand or where should Asia be in a person's portfolio at this point in general? Um? And maybe you can get into that later. But my view is Asia should be that fixed income of fixed income should be reallocated towards Asia because of the different policy response, because of the demography, because of the potential for currency appreciation.

So I think as as people really retold the sixty four look at Asia for your forty percent and look at look at Asian government bonds. Um in terms of equities. Um, yeah, I mentioned Japan. I I like Japan for I think I viewed as the anti US trade. Um. You know, if if you buy the US or even a um just a world m MSCI world, you end up with so much weight into these you know, six or seven U S tech stocks, right, you're no longer getting any

sort of diversification. While Japan is a lot more diversified because it's much higher weight in industrial much higher weight in a consumer discretion is stock, so you know it doesn't have that concentration problem. Um. The second reason why like Japan is again the supply and demand argument, which is exact opposite as that of the US, where you know, in the US we are seeing an increasing float because bar backs are which new offerings are very high, and

right now is being absorbed by retail flow. But my concern is that this retail flour will eventually dry up. Um. In Japan, I think we'll eventually we're gonna run out of Japanese assets. Like the Bank of Japan has already monetized half of the public debt, So I mean the JGB market is structurally shrinking. Same thing on the equity side. You know, they buy e t f s every month. I think right now the Bank of Japan owns something like ten percent on the Japanese stock market. There's zero

new instruants, there's bar backs because Japanese firm. There big government movement for a couple of governments re from in Japan. So you just see a structurally shrinking float um and as a result, prices are writing. I mean, no one cares, no one cares about PAM. But if you look at the performance of the topics since Albano Mix, since UM two thousand twelve, I mean this has just been straight up.

We've also remarkably little correlation with the rest of the world, which is something else that I like because I think that's again as sixty or four in portfil guys. One thing that we're gonna see is, and I think we're seeing that already, is that negative correlation between stocks and bonds. Like back in the days, it was very easy, right if you had stocks, you just put thirty percent of

your money long term treasuries. Even though the yell was not great because the diversification was so wonderful, it didn't improve your sharp ratio. So that's all you need to do. You only needed to buy treasuries to diversify the portfolio. This I think is not gonna happen if we see high invasion, if we see you know, stocks and bonds going down the same time. So you have to be smarter about diversification. And one of the markets with the least correlation in the rest of the world is Japan

precisely for the supply and demand reason. I was describing stand clearer of the craziest things we saw in markets this week. All right, well, you we're going to drill into the craziest things we saw in markets this week that I know. This is a favorite segment of years as well. Uh, I'm gonna put you on the spot. Let's start with you. What's the craziest thing you saw in markets this week? You know, I have to say, it's really hard to figure out what the craziest thing

is on any given week. I mean, we are in a world of Reddit traders in George coin, that equities team leader, you haven't seen anything crazy all year? I think nothing ever surprises me anymore. Um, here's something wild. A bottle of wine that was aged for fourteen months in space at the International Space Station is now up for sale, and it could fetch up to a million dollars um. This bottle is being bundled with an Earth aged wine so that the buyer can taste test both

of them and decide which one tastes better. A billion bucks for spacewine. I dig it, I like it. I don't know. Hey, hats off to the astronauts who didn't drink that while it was up there. You know, I I would have. I think I would have downed that thing about the second night in space. I don't know, so it'd be very hard not to. They must have hit it somewhere, you know. They think it was in like some kind of steelcase cylinder, so no one could

get to it anyway. Yeah, you don't want drunk astronauts find the station of the space station. I guess that that could get that could get ugly. But alright, vet, so that's pretty good one. That's a tough competition. You got a anything that can top a million dollar bottle of space mine. It is a red I guess it's a porto, right, a space bordo. I don't think anything in the space board. No, I actually went outside of markets, because you know, the markets in general are crazy, right.

So my my anecdote is more about healthcare. And I saw that Americans took one and a half found for every month since the start of COVID. UH. So I think on average, people have put on twenty pounds UH since the start of COVID, which which I thought was pretty crazy because it's not like we started from a

healthy base. UM. And it kind of brings me uh jokes aside to to kind of like my secular call on healthcare and also to some exciting FASI and I think you know, as we come out of COVID, there's been damages to the bodies and the minds of of people. I mean, this has been extrolling hard um. And we'll be dealing with the loan I mean long COVID for the people who are COVID, but also for the long lockdowns, if you will. The consequences of that, well, we'll play

out over the next ten years. I think you'll see much higher healthcare spending because of the issues that we've acummenated with COVID UM and also potentially infasion UM. One of the big debates UM. But the FED is UM. You know we can push in our proment rate below four percent because participation is low. Right, that's the Elkosh Cary argument, that you have this reserved army of workers that I dropped out lay before we could come back anytime.

I think COVID is actually shrunk that reserve army, and and we have like how much higher structural and employment due to mental and physical health issues as a result of COVID, And that to me increases the risk and the FED he's gonna mess up um, and it's gonna be too late because they don't understand the level of slack um in the economy labor market. Well, I will say that, Um, I am guilty of that pound and

a half per per month. I think I I've probably put on sporting myself, but I've been trying desperately to take it off because I think we're coming back to the office soon and I I can't wear the sweatpants to work if Yeah, I gotta get back in the soup pants eventually, so desperately trying to take it off. But I I resemble that story a little a little

too much for my comfort. So two good ones there, I I applaud both of you, I'll give you my mind's courtesy of the Wall Street Journal, And uh, this is I think the real sort of market plumbing walks out there will appreciate this the most um. Berkshire Hathaway's Class A share price has gotten so high that the NASDAC can't quote it anymore on some of its popular data feeds, and actually the newer exchange i X had a similar issue. So here's the sort of wonky explanation, again,

courtesy of the Wall Street Journal. NASTAC and some other market operators record stock prices in a compact computer format that uses thirty two bits or ones and zeros. Stock prices are frequently stored using four decimal places to the right of the dollar signs, so, in other words, subpennies. So the highest possible price you can quote Berkshire at is four nine thousand, four hundred and ninety six dollars

point seven to nine five. So I don't know why you need to quote a four nine thousand dollars stock in subpenny increments, But I guess there's some market maker out there making a quitter penny on these trades. So so, uh, I don't know what the solution is they have some kind of bug fix in the work that they can begin to quoting Berkshire again. But I don't know, Vincent, maybe a stock split or something. Maybe it's time for Warring to consider a stock split. He always said it

was against it, so it's it's a great story point. Michael. Well, you guys have not disappointed me. Really appreciate your time. If you good luck with those tweets, I'm definitely going to need them. Yeah, you might want to just log off for a couple of weeks. I don't know. I don't know. Uh, and Vincent always great to catch up with. You appreciate your time and hopefully we can do it again. Thank you. What goes up, We'll be back next week. Until then, he can find us on the Bloomberg Terminal

website and app or wherever you get your podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter follow me at Reaganonymous. Debbia Balgie is at Dibia Balgie. You can also follow Bloomberg Podcasts at at podcasts. I thank you to Charlie pall of Bloomberg Radio and the voice of the New York City subway system. What Goes Up is produced by topur Foreheads. The head of Bloomberg Podcast

is Francesco Levy. Thanks for listening, See you next time.